"national affairs" and thank you for joining us today. michael bolton will be on capitol hill this afternoon to answer questions about his report about the january 6 attack on the capitol. watch live coverage of his testimony before the house administration committee at 2:00 eastern here on c-span3. week nights this month we're featuring american history tv programs as a preview of what's available every weekend on c-span3. and tonight we look at vietnam war oral histories. clyde romero served as a pilot during the vietnam war. in our interview, he recalls his tour as a helicopter pilot and describes what it's like to be shot down. he discusses the high risks associated with the job and remembers some of his fellow pilots who didn't come back. watch tonight beginning at 8:00 eastern and enjoy american history tv every weekend on c-span3. professor elizabeth powers is on your screen.

she teaches economics at the university of illinois and joins us for a discussion on the role childcare plays in the covid-19 economic recovery. professor powers, explain first what we know about how big a hit the u.s. childcare industry took over the past 13 months. >> good morning, it's nice to be here. well, covid has had a profound impact on childcare and a lasting impact. when covid hit, and there were stay-at-home orders, because that had an immediate and dramatic effect on the childcare industry. two-thirds of childcares closed, they suspended their operations completely. and 65% of childcare workers were sent home. at the same time, of course, those parents who could work, emergency workers had some

trouble finding childcare. and as people have slowly come back to work, childcare has continued to be a nagging problem for parents. >> another way to look at the numbers from the bureau of labor statistics, some 167,000 childcare workers lost their job between december of 2019 and december 2020. do you think all those jobs will come back in a post-covid economy? or has covid and what its force for how families have had to rethink childcare, is it going to change the way people use childcare, when we need childcare services as much? >> well, about the number of employees of childcare is still down about 15% from pre-covid. as we all know, parents have coped in a number of ways, work from home has been really

important, and a fair number of mothers have had to leave the labor force or work less than they would like to or go in and out of the labor force. so, i think right now parents are coping with kind of stop-gap measures. childcare slots, the number of spaces for children are still way down. and so right now i would say childcare is scarce, there's a risk that it's going to be more expensive, and that people will use less of it normally. but i think that the american rescue plantains a lot of aid both to childcare facilities, childcare providers, and parents. so that may have a big impact in getting the industry going again. i will say one thing i found interesting from a survey of

centers, which was that many centers actually started online programs, just like k-12 did. and most of those centers that started online programs say that they're going to keep those programs in some form. so, yes, maybe we have seen, you know, some permanent change in the modes that childcare is delivered through. >> elizabeth powers, professor at the university of illinois institute of government and public affairs, teaches economics. and with us for about the next 25 minutes this morning. let me give the phone numbers. 202-74-8000, parents. 202-7-8001 for childcare workers. go ahead and start calling in. professor powers, as that's happening, you mentioned the american rescue plan and the funding that's in that specifically for the childcare industry. just to walk through some of

those numbers, some $39 billion in direct funding for childcare, which would include $24 billion for stabilization fund for childcare providers. $15 billion to fund childcare and development block grants. explain what that fund does and what those block grants do. >> um, there are two funds, as you mentioned, in the act. so, one is really direct aid to providers. so, maybe a little background. the c.a.r.e.s. act, which had the famous ppp program, which provided forgivable loans to small businesses. many childcare providers in surveys at the time of the initial wave of covid said that they were going to use the ppp funds. but in reality only 7% of providers appeared to have been able to access the ppp fund. so i think the first leg of this american rescue plan is really

providing the direct funding to the childcare centers and other providers like the ppp would have if it had, you know, been accessible to providers. and so it pays for mortgages, keeping workers on the payroll, covid compliance expenses. so really just a fairly large amount of direct aid to providers. and the other piece you mentioned is the $15 billion piece that is aid to states. primarily, states run a program that subsidizes childcare for usually quite low-income people. it will largely pay for their childcare. and so this is additional funding to states primarily so they can be more generous with

who can receive these funds. >> and then two other aspects of the american rescue plan, some changes of course to the childcare tax credit and the dependent care credit. and then increasing the childcare entitlement to states. explain those two aspects of the plan. >> sure. so, i think the most dramatic change, perhaps -- well, i do think the most dramatic change is going to be the changes to the child and dependent tax care credit. so formerly, this is a deduction that you can take for paying for childcare was pretty small. a person could receive a family with two children, for example, could receive up to $1,200 to pay for part of their, credit for part of their childcare expenditures. and this has been increased

dramatically in a couple ways. first, the amount of the claimable deduction has a maximum of $8,000. now, that's on $16,000 of childcare expenses. but that's still, you know, for people who are paying a lot for childcare, that's a tremendous relief, that's a 50% effective reduction in the cost of their childcare. the second aspect of the plan that's really important is that it's refundable. so, a refundable tax credit means that if the tax credit exceeds the amount of taxes you owe, you get a check for the excess. so you can claim for a family of two that's modest income, they can claim the entire $8,000 even if their tax liability was $2,000. even if their tax liability was zero. and that's going to have a

really big impact actually on child poverty. it's going to effectively reduce it by about 40%. the other interesting aspect of the expanded child and dependent tax credit is that the families, the income of families that can qualify for some of the credit, at least, is going to be set much higher up to about $125,000 before there's even a phaseout of the credit. >> that's what's -- >> so -- >> go ahead. >> i think this is almost the major piece of the legislation, obviously it's going to have a big impact on families. >> that's what's in the american rescue plan. want to hear from you, our viewers, about what's helped you, how you've dealt with childcare during the pandemic. again, focusing on parents, 202-748-8000. and childcare workers 202-748-8001. all others 202-748-8002.

one question to start from the viewers from lee on twitter, professor powers. lisa, a childcare in the u.s. should be handled as it is in europe. it's not the family responsibility in the european union. it's no problem for rich people, but it's a big problem for poor people in the united states. >> yeah, most definitely. and the united states is pretty unusual in not having very significant publicly provided care or heavily subsidized care. so, i think this is part of where the initial tactic of talking about childcare's infrastructure came from. it's since been somewhat reframed by the white house to a jobs bill because of the pushback in calling it infrastructure. but i think one of the things

the viewer might agree on is childcare is like an essential foundation for supporting work and supporting the productivity of families. so, people with young children tend to be coming into their prime-age working years. so, we'd like them to be productive in the labor market. and two-thirds of children have parents who are not available or who are both working. so there's a big need for childcare. it's a big support for healthy families. we could also talk about it's a big support for early childhood development. so, yes, in other countries, this is considered more or less a basic entitlement. >> and it's $25 billion in president biden's infrastructure

proposal for childcare facilities. we can talk more about whether that should be considered infrastructure. but want to hear first from barbara from oklahoma calling in. you're on with professor powers. >> yes, good morning. i'm from california, and i worked everywhere from the '60s up, i had three children that i took jobs that i could be home with my kids during the daytime. and i didn't make a lot of money, but i did it mostly for the insurance and being home with my kids. and my ex-husband was home at night. and this thing about giving people money, money, money from the government, all it's doing is making people dependent on them. and then they're getting lazy. and, believe you me, this united states is really getting lazy, and it's going more and more socialist. and it's really burning me. i don't know why people can't take responsibility for themselves. >> professor powers?

>> um, yeah, i think there are two things that i would say to barbara in response. one is that childcare has become -- well, one is that many families have to work to get by. we don't have a strong safety net in this country, especially for cash, for money you can spend on rent and just clothes and daily living. so, we don't have a strong safety net, and we really come to expect that people will make up for the absence of a strong safety net by working. and, so, lots of families can't get by unless they work, unless both parents are working or are in a single-parent family,

obviously there's only one potential earner in the family. so it's actually under the system we have, which lacks a lot of direct support for families, people must work to get income for their household. and the other thing i'll say is that, you know, childcare is really expensive. center care and even family care, somebody running -- offering care for children out of their home. in many, many states, infant care, for example, costs as much as college tuition at the public state school would cost for your child. so, that combination of families really not having a lot of

choice about being in the labor market and the high, high expensive childcare doesn't make it realistic for many families to get by without support for childcare. >> what do we know about the average cost of childcare? has there been studies done that shows it's getting more expensive post-pandemic or will be more expensive post-pandemic? >> yeah. this information is somewhat hard to come by. covid closed down a lot of the industry really quickly. it was somewhat chaotic. but, some surveys of center care providers found that childcare costs have gone up for the ones that remain open, the prices have gone up by about 50%. so that's enormous. and similar or greater at these family care providers who run daycare out of their home.

and that's a combination of factors. one has been that, you know, that just the cost of childcare facilities and operators dealing with covid has been very high. and also as part of that, there's been social distancing. and social distancing has impacted care providers a lot. they can't take as many children as they did prior to covid. and of course all the providers were set up to operate with the capacity that they had before covid and they were getting by with the capacity they had before covid, and after covid the capacity is much lower. so they're charging more to serve fewer children. >> should parents expect those price increases to come back down as the american rescue plan money works its way through the system, and if this

infrastructure spending another $25 billion works its way into the system? >> um, i think we're going to see high prices in the near term. they're going to continue. a survey of providers who were going to try to increase their revenues next year, so they were going to try to do it through price increases. and of course they have all these additional costs that they didn't have before, and those are passed on to parents. so -- and a lot of capacity, we don't know how many slots, childcare spaces have been lost in a longer-term sense, but about a quarter of childcare centers that closed their doors initially have not come back into the marketplace. so we're going to see fewer slots for a while in the childcare marketplace, and that's going to drive up prices. the childcare and dependent tax credit presumably is going to

help a lot with that by subsidizing 50% of many families' childcare. on the other hand, that's going to increase demand for childcare a lot. and you can see some increased prices somewhat offsetting those gains. >> to bobby in alabama. good morning. you're next. you're on with professor powers. >> yes. i agree, too, that it's a strain on parents. i have a daughter who finished college, but she was a single mother. and i helped her with her care because i realized the expense of childcare. but what i see around me every day is people that's really taking advantage of this. you have people that are being subsidized with housing, single mothers. my daughter was not, she was a single mother, but she got a job. i said you cannot depend on the

government to take care of you and your child. there's so much fraud and abuse in the system. and they really need -- when you look around and see people that are getting subsidized for childcare and can live better than the people that's working, i'm retired and i pay my medical bills, and i know so many others that are doing the same. i just think there needs to be more restrictions and more lookback when the people apply. it's very expensive. i just finished paying my daughter's school loans. but they need to tighten up on the people and let them look at their priorities. >> bobby, got your point. professor powers, let you jump in. >> um, yeah. i would say that there is auditing of people who are receiving childcare benefits. it's done -- you have to be employed or you have to be a

full-time student, or you have to be actively looking for work to receive the childcare subsidy in the states. at least in my state in illinois, this is enforced pretty actively. so, for example, the state can see your earnings. they can see your employment history. and so the state does check if people are actually earning enough to qualify for the childcare subsidy. and, similarly, if you're a full-time student, you have to show -- you have to prove that you're a full-time student. and if you're searching for work, that's time-limited. so they'll give you, in many instances, a couple weeks to search for work. so, there is monitoring in the

system. >> to andrew out of massachusetts. good morning, you're next. you're on with professor powers. >> good morning. first thing i'd like to point out is the last caller saying the word fraud. that's a large part of i think -- i'm 42. in the past 20 years i've watched workers like daycare, people do housecleaning, other small services. they're able to charge what they want. they're able to evade the irs. they can get paid cash. they're essentially doing jobs that family members used to do for their own households. maybe it's a problem with divorce. but where are grandparents? my grandfather worked in a wood shop and took care of me every day after school as much as i can remember. i don't know why -- >> washington journal live every day at 7:00 a.m. eastern. and you can find more at c-span.org. we're leaving this now to bring you